The Future of Sino-Africa Relations
The Future of Sino-Africa Relations
African Foreign Policy - Part 2
This is the second of three posts on African foreign policy under multipolarity. The first post outlines what African countries should prioritize as they engage the world; this post looks at how China ought to rethink its Africa Policy moving forward; and the third examines potential opportunities to improve US (and Western) Africa Policy.
I: Enabling Friends’ Bad Habits
As The Economist once put it, some countries get a loan to build a railway, but Kenya might have built a railway to get a loan. Kenya’s new 700km standard gauge railway (SGR) cost $4.7b to build. It was also wildly overpriced and poorly thought out. Kenyan analysts’ informed protestations were roundly ignored. Until recently the contrac It later turned out that the line can only be commercially viable if extended through Uganda to Rwanda (see map below). Despite the Kenyan government’s coaxing of haulers away from the roads, the rail traffic is not enough to service the loan.
Both Uganda and Rwanda have yet to fully commit to the idea. Tanzania’s planned line to eastern DRC will likely sap more traffic from the Kenyan line. In any case Kenya needs another loan to extend the line to the Ugandan border, even as it drains its Treasury to service the original loan. At the moment the railway ends abruptly in the middle of nowhere (so to speak).
In short, the Kenyan SGR is currently quite the White Elephant. It is also Chinese designed, financed, and built.
Angola presents a related, albeit somewhat different fiscal boondoggle. After emerging from decades of conflict, Angola found in China a partner of convenience with whom it could barter its oil for infrastructure and other imports. On paper this seemed like a good idea, especially when contrasted with the standard “Western model” of oil-for-elite-properties in Europe, the US, and tax havens. By 2020 more than 60% of Angolan oil exports flowed to China. Angola also quickly became the largest recipient of Chinese loans in Africa. During the same period, Angolan elites drove their economy into the ground — including by bleeding the national oil company, Sonangol, dry.
At the center of Sino-Angolan commercial relations was the “Queensway Group” of Hong Kong, a web of companies with reported links to Chinese intelligence and state-owned companies. A significant share of the pillaging of Angolan public wealth was reportedly channeled through the group. Given the alleged links to Beijing, Chinese officialdom must have known what was going on.
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Forget the misplaced hysteria about China’s alleged “debt-trap diplomacy” in Africa that is common in much of the Western press (commercial loans from Western lenders or Western-led multilaterals typically dominate African loan books). The biggest strategic challenge for African countries arising from China’s recent commercial forays in the region is the apparent insouciance about rank bureaucratic incompetence, crippling corruption (not the “facilitation” kind), poor project implementation, and the proliferation of failed mega projects.
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Such failures are not just bad press for China. They actively undermine Beijing’s geopolitical ambitions, in addition to jeopardizing African countries’ hard-won macroeconomic stability. Presumably, China wants African allies that are more than just votes at the UN. Allies whose economic capabilities and political influence can help amplify China’s power on the global stage and showcase the superiority of the “Chinese Model” of economic and political management (or simply demonstrate that it pays to be an ally of Beijing regardless of ideological orientation). Actively enabling the colossal misbehavior of ruling elites lacking an encompassing interest or long-term vision for their countries (like in Kenya and Angola) is as far from this ideal as one can get.
For a country (and regime) that prides itself in its long-termism, China’s Africa Policy serves up a lot of questionable short-term thinking.
II: The Future of Sino-African Relations
As President Xi Jinping starts his third term, there is no question that, as a revisionist global power, China wants to be a favored partners of African states. At multiple FOCAC meetings since 2000 Beijing has committed billions of dollars in loans (and some grants) to African economic development (totaling about $160b since 2000) — the (mostly positive) effects of which are readily visible across the region. For 33 years straight, the Chinese Foreign Minister’s first international trip takes him to Africa — an important symbolic performance of the region’s strategic importance to Beijing. China also likes to engage in high-visibility direct diplomacy — like the construction of the African Union’s new headquarters, state houses (“palace diplomacy”), parliaments, and other civic/cultural buildings.
However, if China wants to build even stronger relations with African countries and maintain the significant goodwill it enjoys across the region (see image above), it has to learn from the mistakes of the last 20 years. There is no question that over the last two decades Chinese financed and built roads, power lines, dams, and other infrastructure have unambiguously improved livelihoods in Africa (despite all the corruption and questions about quality). Yet all that investment can easily be swept down the drain by the consequences of short-termism on the part of both African and Chinese officials.
I do not think that China is doomed to failure in Africa. But it can fail if it does not take a more constructive approach to commercial relations with African states. Deliberate effort to ensure incentive compatible deals that nonetheless generate sustainable growth without saddling countries with white elephants will be particularly apposite as Chinese growth slows, interests rates rise, and cash becomes scarce. There is corruption, and then there is corruption.
At this critical juncture in African history, Beijing has a unique opportunity to build its global reputation through constructive partnership. As a corollary, failure will tarnish its global brand. Consider the fact that, regardless of their debt profiles, popular narratives about debt overhangs in African states invariably focus on Chinese loans. Over time, African publics may come to associate China with economic mismanagement thereby limiting the scope of Sino-Africa relations.
Under the assumption that China will remain a valuable economic partner to African states into the foreseeable future, below I provide some suggestions on how Beijing may avoid the pitfalls of short-termism discussed above. In an earlier post I discussed how African countries ought to approach their engagements on the global stage, including with China.
Externalize Chinese bureaucratic competence
A lot of people like to credit autocracy with China’s economic miracle. They are wrong (see here, here, here, here, and here). It takes a lot more than crude coercive power to lift hundreds of millions of people out of poverty. Democracies and autocracies alike excel when managed by competent governments sitting atop professional goal-oriented bureaucracies (which need not be perfect, or corruption free). One of the most valuable offerings China could extend to its partners abroad (regardless of their regime types) is how to cultivate and sustain bureaucratic competence at scale.
Mostly under-governed and misgoverned, African states would particularly benefit from assistance to boost their bureaucratic capacity. In this regard, China has unique advantages. Inured by centuries of strong statehood, most Westerners only ever think of governance reforms as constraining government (even in contexts where governments barely exist!) China would provide a different approach that professionalizes and extends the reach of African governments.
Rather than waste time and resources on party-to-party exchanges (China should consult Western attempts to export their political models to Africa), Beijing should instead develop an ambitious goal of helping its African partners build competent developmentalist bureaucracies. The idea here is that Chinese assistance would yield bureaucracies that are good enough (warts and all) to jumpstart African states’ economic takeoff, much as happened in China. Hopefully such bureaucracies (while still incentive compatible for politicians) would not, for example, approve the construction of commercially unviable railways to nowhere just so politicians can get their cut.
Invest in African agriculture
African states have some of the least productive agricultural sectors in the world — mostly due to a lack of state investment in infrastructure, inputs, and extension services (see figure below). Low agricultural productivity, in turn, is an important stumbling block to industrialization in the region (not to mention the human cost of famines and threats to political stability).
Investing in African agriculture would be a win-win proposition for China. First, it would provide its African partners with a strong basis for economic development and political stability. Second, it would contribute to China’s strategic foreign investments in agriculture to supply its domestic market — especially its growing middle demand for meat and dairy. Third, it would help reduce the yawning trade deficit with African countries and reduce associated tensions.
Depending on the country, Chinese investments would focus on research and development, irrigation, mechanization and other inputs (like fertilizer), farm-to-market logistics (especially safe storage), or agro-processing.
Be more aggressive in adding African links to Chinese value chains
Mass job creation is the best way to quickly lift millions of people out of poverty. No contemporary country knows how to do this better than China. As the world’s factory, China is a key part of global value chains. It is also working on moving up the value chain to higher value products and facing a demographic wall that will raise the cost of Chinese labor. A number of Chinese firms have began production in African countries precisely for these reasons.
Yet there is more that Beijing could do to boost African participation in global value chains. For example, it could provide policy incentives for collaborative ventures that result in technology transfers and that boost managerial know-how. It could also eagerly embrace African attempts to add value to mineral exports. And like improvements in agriculture, African participation in Chinese value chains would help reduce African states’ trade deficits with China.
Expand investments in African human capital
By 2015 China had already surpassed both the US and the UK as the leading destination of Africans studying overseas (before Covid estimates put the current figure at more than 74,000 African students). This was not by accident. Investing in its partners’ human capital is a core part of Chinese foreign policy. These investments coincided with the explosion of demand for higher education in African countries. Following the long decade of economic stagnation (1980-1994) and disinvestment in public services (including education), African countries aggressively expanded access to education, including tertiary education. However, decades of disinvestment mean that the available capacity in both public and private universities cannot meet the sky-high demand. This demand can be met by foreign universities, including in China.
Training scientists, engineers, journalists, or businesspeople at reputable Chinese universities will go a long way in increasing the stock of quality human capital in African countries. It would also provide a base for strengthening linkages between African and Chinese firms in addition to providing potential employees for Chinese firms operating in the region. More broadly, it would be a valuable investment in Chinese soft power for the long haul.
Cultivate a more sophisticated understanding of African politics
Formally, China espouses a policy of non-interference in its African partners’ domestic affairs. In practice, China seeks to build personal relationships with political and economic elites in the region. There have also been sporadic attempts to establish formal ties between African ruling parties and the Chinese Communist Party. Often, these efforts betray a misunderstanding of African politics motivated by a projection of the Chinese system.
To be blunt, Beijing doesn’t seem to understand how to deal with roving bandits with short time horizons (due to elections or other regime threats) and limited state capacity outside of their capitals.
Yet if it wants to be a constructive development partner to African states, China can no longer hide behind its non-interference policy. Economic development is as political as it gets. Any constructive partner in that effort necessarily has to invest in knowing and appropriately responding to host political economies.
Simply assuming that every public official has a price is a surefire ticket to ruin. Instead, understanding the intricacies of domestic institutions and politics would unlock opportunities to tie the hands of African elites in a manner that avoids some of the pitfalls highlighted above. For example, availing contracts to legislatures (as required by law) could mitigate unsustainable overpricing of infrastructure projects and boost China’s image as a responsible development partner.
III: Conclusion
Sino-African relations have both a long history and promising future. So far in this century China has been a net positive influence on economic development in Africa. However, if the relationship is to remain on a positive footing, Beijing needs to make a number of adjustments based on lessons from the last 20 years. I have proposed that the adjustment should include proactively helping African countries build effective bureaucracies, investing in African agriculture, incorporating African links to Chinese value chains, expanding investments in African human capital, and cultivating a more sophisticated understanding of African politics.
Finally, I should note that the rise of personalist rule in China under Xi Jinping’s likely life presidency is a source of uncertainty about Sino-Africa relations. However, I have (moderate) confidence that the Chinese political system will remain stable, and that Africa will continue to be a core part of China’s global geopolitical ambitions. This reality presents a great opportunity for African leaders to build partnerships with Beijing focused on improving the livelihoods of their populations.